Type of paper: Report

Topic: Business, Customers, Commerce, Internet, E-Commerce, Products, Consumer, Services

Pages: 7

Words: 1925

Published: 2020/12/22

Introduction Electronic commerce or E-commerce is a form of business that involves the buying and selling of goods and services electronically or business that is conducted through the internet (Maamar, 2003, p.251). E-commerce does not involve any physical of direct contact between the buyer and the seller. E-commerce can be between two businesses or a business and a customer. E-commerce is a business strategy for small and medium sized businesses to grow rapidly. According to Maamar (2003, p.251), e-commerce is a way of reaching customers from every part of the world who have access to the internet. There are several categories of e-commerce namely;
business to business (B2B),
business to consumer (B2C),
consumer to business (C2B) and

Consumer to consumer (C2C).

In this report, we will only introduce and discuss the B2B and B2C categories of e-commerce because they are most appropriate for a book retail shop.Business to Business E-commerce (B2B) B2B e-commerce is a category of e-commerce that involves two businesses or companies doing business (Qin, 2009, pp.24-36). It is a category of electronic commerce that involves the business relationship between two businesses, and the value and volume of both businesses can be very rewarding (Qin, 2009, pp.24-36). Examples of this category of e-commerce can be a wholesaler selling to a retailer or a manufacturer selling to a distributor. Pricing between the two businesses are negotiable and mainly depends on the quantity of the order. The B2B e-commerce has two components; e-infrastructure and the e-market components. The e-infrastructure component consists of logistics, application service providers, outsourcing of functions, auction solution software, content management software and web-based commerce enablers. E-markets are simply websites where online transactions can be conducted between buyers and sellers. The advantages of B2B e-commerce are summarized below.

B2B e-commerce increases the communication between the two companies hence allows business to flow faster and smoothly.

B2B e-commerce allows for the reduction of prices since all business transactions are done electronically.
B2B reduces the chance of making mistakes and if any mistake is made, they can easily be corrected.
Business to Consumer E-commerce (B2C) It is a category of e-commerce which is characterized by electronic business transactions between customers and a business which consists of a business selling to the public electronically without any form of human contact (Qin, 2009, pp. 24-36). The customers gather information about goods and services from websites and purchase the same through online payments after which they are physically delivered by a courier service in any location. Business to consumer e-commerce is the oldest form of e-commerce and also the most common (Qin, 2009, pp.24-36). Business to consumer e-commerce reduces consumer costs by increasing access to information for consumers and allowing the customer to find the most affordable and competitive prices for a product or service. For a bookstore, it is much cheaper compared to a brick and mortar structure because the cost of market entry is reduced. Setting up and maintaining a website is cheaper than building a physical structure. Business to consumer e-commerce is very advantageous to both the customer and the seller. The advantages of B2C e-commerce are:

It allows the company or business to extend its services to customers and increase its market share.

B2C e-commerce provides a business with the chance of increasing its customers worldwide.
B2C e-commerce offers the customer a wide range of choices at cheaper prices.
Online stores are open 24/7 hence giving the customer opportunity to shop at their convenience while increasing sales for the seller.
Applications of E-commerce
E-commerce is used in supply chain management which is a network of facilities and distribution options (Bhasker, 2009). The network assists in the purchasing of materials, transformation of the materials into finished products and the distribution of the finished goods. It is used in the procurement and purchasing of goods and services. It involves identifying a need, knowing the requirements that satisfy the need, identifying available suppliers and offering the desired product to the customer (Bhasker, 2009). E-commerce is also used as a way of marketing and advertising goods and services online in the form of banner ads, e-mail marketing, and search engine optimization. Online advertising allows the seller to market their goods through sites that customers regularly visit social media sites (Bhasker, 2009). Online auctions can also be conducted via the internet which allows multiple participants to bid and buy on a single or multiple items. E-banking is an application of e-commerce which allows the sellers and buyers to move money electronically. It offers online fund transfer and payment systems, securities trading and retail banking. Likewise, it allows for internet banking and direct deposit which is convenient for businesses prone to theft. E-banking is a convenient, easy, fast and reliable way of conducting online transactions. Electronic retailing or e-retailing is the most common form of business to consumer transactions that include the marketing of retail goods online (Bhasker, 2009). Online publishing is the Publishing of books, newsletters, and promotional materials on the internet. It is very beneficial to a book retailer because it lowers the cost of printing, allows universal access and distribution are easy and fast.Opportunities of E-commerce Direct sales: Businesses use e-commerce for the direct selling of products and services online (Burgess, 2002, pp.200-250). For some businesses, the product can be sold and delivered online while for most businesses the supply and delivery requires a physical delivery. For a retailer who plans on conducting online transactions, they might need to re-evaluate how they do business (Burgess, 2002, pp.200-250). Every aspect of e-commerce transactions has to be carefully handled to ensure smooth business transactions. Pre-sales: It is a way of exploiting the use of the internet to boost your sales leads through pre-sale activities. It can be done through the use of promotional materials for your website, email campaigns and online advertising to attract customers to view your site. Post-sales support: a retailer or business can use the internet to automate its customer support and decrease routine service calls from the customers (Burgess, 2002, pp.200-250). An appropriate way to get this done is to post a Q and A section on your website where customers can ask questions about the product, and you give them answers. This provides access to any new customer who may have similar or identical issues to retrieve the answer with ease. Competition: E-commerce creates competition among business offering similar services or products around the world which leads to greater customer satisfaction. This is because most businesses try to dominate each other by providing better quality of their products and services and simultaneously reduce the cost of goods and services. Growth potential: There is tremendous growth potential that comes with using e-commerce business transactions (Burgess, 2002, pp.200-250). The growth comes from increased sales due to a wider market which eventually creates a significant market share for your products. Some businesses have seen an increase of up to 3% annually since they started using e-commerce as a business strategy.Challenges of E-commerce
1. Implementing a content marketing strategy.
Very few online business owners know how to market their products and services effectively despite the growing number of online businesses (Burgess, 2002, pp.200-250). Content marketing involves a variety of tactics required for a business to be efficient. The business owners need to evaluate which tactics works best for them, their brand and customers as well. Some of these tactics include social media, mobile content, e-newsletters, and blogging.2. Building trust through your website.
For e-commerce businesses, their web sites are important in building trust between them and their customers. When a business's website design is poorly done, there is a good chance that it is going to lose traffic and also customers because their website is the first impression customers have about them (Burgess, 2002, pp.200-250).. A trustworthy site is easy to navigate, has a clean layout, contains contact information and provides clear descriptions of the product or service you wish to sell.3. Using big data to gain insights into customers.
Most e-commerce businesses and online marketers use big data to get insights about their customer’s needs. The consequence of using big data is that it is challenging to analyze without the help of special programs (Burgess, 2002, pp.200-250). E-commerce businesses should focus their attention on website performance, customer behavior and sales and from these determine what needs to change.4. Integrating mobile into your website.
Mobile commerce is a fast growing market among online shoppers; however most retailers fail to fail to adapt to this changing way of online purchases and hence lag behind in their sales. In order for e-commerce businesses to increase their sales and attract more customers, they must optimize their shopping experience to include the mobile web.5. Delivery propositions.
Successful e-commerce businesses need to balance their delivery schedules to suit the customer’s expectations and demands (Burgess, 2002, pp.200-250). This is done by making deliveries faster than expected and with an additional free delivery service to entice their customers.Consumer behavior and preferences Online shopping is the third most sought out internet activity in the world. A recent study report claims that more than twenty per cent of internet users around the globe already buy products and services online (Becker, Lee and Nobre, 2010, pp.291-302). When potential buyers feel the need for some service or product, they automatically go to the internet and search for information about it. However, customers do not seek actively most of the time, and they are most attracted to the first form of information they get from the product (Becker, Lee and Nobre, 2010, pp.291-302). The consumer evaluates his or her alternatives and then makes a purchase based on their desired need. Consumer behavior when making online purchases are significantly affected by their attitudes towards the product, their intended purpose of the product, the product characteristics and the website quality. A consumer is more likely to buy a product from a well-organized website than a poorly organized one (Becker, Lee and Nobre, 2010, pp.291-302). If a consumer feels that a product does not suit they intended purpose, they are most likely not going to purchase it. Moreover, the demographic, social, economic, cultural and psychological factors mainly affect consumer behavior and their online purchases. Consumer behavior can also be affected by their exposure to the company’s or business’s marketing strategy (Becker, Lee and Nobre, 2010, pp.291-302). Consumer preferences can be satisfied by creating and delivering a more desirable online experience. Advertising goods on social media sites like Facebook and Twitter, and giving out free samples of your products can help satisfy consumer preferences because they try the product before buying. Likewise, enhancing existing products and developing new products to suit consumer needs can also satisfy consumer needs. Also, giving sufficient information about your products on your website is another way to meet consumer needs. Retailers should offer buyers immediate and quick delivery service after purchase of goods and also offer reduced prices and discounts to allow consumer satisfaction. In addition to enhancing customer experience when visiting websites, allow your buyers the chance to add, remove or edit out products from the base bundles hence making their experience more satisfying and straightforward.Conclusion E-commerce is a broad category of business which is very beneficial to small and medium owned businesses and also start-ups. The benefits of e-commerce on a business, primarily depends on the effort that the business owner puts into it. Having a well-organized website for your business, allowing for easy access to the site and providing all required data about your products or services creates trust between you and the consumer. E-commerce is cheaper and less complicated to set up than a ‘brick and mortar’ structure and also has the capability of reaching more people than a business with a physical address. Customer satisfaction is greatly improved when the online transaction is reliable and products are delivered on time. E-commerce business strategy would be appropriate for a local book retailer to expand their business nationally and internationally.

References

Becker, K., Lee, J. and Nobre, H. (2010). The new e-commerce freeloaders: effects on consumer
behaviour and decision-making. International Journal of Technology Marketing, 5(4), pp.291-302.
Bhasker, B. (2009). Electronic commerce. 4th ed. New Delhi: Tata McGraw-Hill Education.
Burgess, S. (2002). Managing information technology in small business. Hershey, PA: Idea
Group Pub., pp.200-250.
Maamar, Z. (2003). Commerce, e-commerce, and m-commerce. Commun. ACM, 46(12), p.251.
Qin, Z. (2009). Introduction to e-commerce. Berlin: Springer, pp.24-36.

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